Notification No. 06/2024-Central Tax (Rate): Amendments to GST on Metal Scrap
Date of Notification: October 8, 2024
Notification No.: 06/2024-Central Tax (Rate)
Effective Date: October 10, 2024
Issued by: Ministry of Finance (Department of Revenue), Government of India
Key Amendments Introduced:
The Central Government, under its powers conferred by Section 9(3) of the Central Goods and Services Tax (CGST) Act, 2017, and based on the GST Council’s recommendations, has introduced amendments to Notification No. 4/2017-Central Tax (Rate), focusing specifically on transactions involving metal scrap.
A new S. No. 8 has been added to the notification, which deals with the supply of metal scrap. Below is a table outlining the changes:
| S. No. | Tariff Headings | Description of Goods | Supplier | Recipient |
|---|---|---|---|---|
| 8 | 72, 73, 74, 75, 76, 77, 78, 79, 80, 81 | Metal scrap | Any unregistered person | Any registered person |
Important Points:
- Items Covered: The metal scrap under tariff headings 72 through 81 includes a wide range of scrap materials, such as iron, steel, copper, aluminum, and other metals.
- Supply by Unregistered Persons: The notification specifies that when an unregistered person supplies metal scrap to a registered person, the reverse charge mechanism (RCM) will apply.
- Impact on Registered Buyers: Registered buyers are now liable to pay the GST on behalf of unregistered suppliers, ensuring tax compliance in the metal scrap sector.
Key Dates:
| Event | Date |
|---|---|
| Notification Date | October 8, 2024 |
| Effective Date | October 10, 2024 |
| Deadline for Compliance | Ongoing from October 10, 2024 |
Rationale Behind the Change:
The metal scrap industry often involves transactions between unregistered suppliers and registered businesses. By mandating that registered recipients must pay the GST under RCM, the government aims to bring more transparency and compliance to this sector, preventing revenue leakages.
With the introduction of Notification No. 06/2024-Central Tax (Rate), businesses involved in metal scrap trading should take immediate steps to comply with the reverse charge mechanism provisions. Starting from October 10, 2024, registered persons purchasing metal scrap from unregistered sellers must ensure that the appropriate GST is paid.
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Please define additionally, a TDS of 2% will be imposed on the supply of metal scrap in B2B transactions.